It is with a mix of celebratory joy and nostalgic longing that I said goodbye to my SoCal townhouse for good this morning. Escrow closed yesterday, and as of today I am no longer a homeowner. Having rented in the Bay Area for a year and a half, I should be used to no longer being master of my domain, but it still feels weird to know that piece of real estate is no longer mine.
Having bought that lovely condo at the beginning of the last real estate boom, watched the era of bidding wars and inflated home prices unfold and peter out, and worked at Trulia for the past 18 months, I knew the negotiating process would be an interesting experience, and it certainly was.
First, don’t believe the hype: as far as I can tell, prices are dropping. Sure, I only sold my one house, and some markets like San Francisco and New York City are largely immune from market fluctuations, because everybody wants to own real estate there. But for the rest of us? Double-check your parachutes.
Second: if your house is on the market, take care of the mold now before your buyers request a 5-figure mold remediation credit, because they will.
Third: if you bought a few years ago, are looking to sell, and stand to make a substantial profit, don’t wait–sell now: you don’t know how the subprime mortgage market’s troubles will affect your home’s value, and the market may well have peaked in your area.
Fourth: if you’re renting now, stay where you are and save your money for a big down payment in a year or two. Those no-money-down, 103%-financing loans are disappearing fast, and you’ll likely have to borrow the old-fashioned way.
Sure, I’ll miss my house. I already do, and I think my cat does too–he sure loved running up and down those stairs (we got the kitties a rental with stairs, too).
But amidst the real estate frenzy that seared through the country over the past few years, I feel comforted by the feeling that the basics never go out of style: buy low, sell high, and get stairs for your cats.
Read the rest of my home-selling saga: part 1, part 2
Popularity: 6% [?]
`
March 19th, 2007 at 7:03 pm
Great work, Heather! Congratulations on the Carnival Win.
May 15th, 2007 at 11:03 am
Thanks for your insight. Another thing you should think about is considering the transaction costs and holding costs. Transaction costs include all the costs of buying the property, as well as all the costs of selling it, and can easily top 10% of the sales price if you pay a full sales commission. Have any of you heard of the new reality show Bought & Sold on HGTV? You should check it out: http://web.hgtv.com/webhgtv/images/pac/59889/start_at_home.html?section=boughtsold,panel=videos. It’s a great show and you can really get a great idea on how the real estate industry works, from the inner workings, to the stories, the drama behind the sales, and the lengths brokers will go to just to get the deal. I work with the show, and this season is going to be great. The show airs Sundays at 10pm on HGTV.